How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Thor Industries (THO) ten years ago? It may not have been easy to hold on to THO for all that time, but if you did, how much would your investment be worth today?
Thor Industries' Business In-Depth
With that in mind, let's take a look at Thor Industries' main business drivers.
Founded in 1980, Indiana-based Thor Industries is the largest manufacturer of RVs in the world. The American company builds a variety of RVs in North America and Europe, and sells those vehicles along with related parts and accessories to independent, non-franchise dealers throughout the United States, Canada and Europe.
Thor, through its subsidiaries, is the leading RV maker in North America in terms of unit sales and revenues. The company’s North American operating subsidiaries include Airstream, Thor Motor Coach, Keystone, Hearland, KZ and Jayco. Under the company’s decentralised structure, each of the subsidiaries operate independently. Thor is the #1 player in travel trailers, fifth wheels and motorized RVs in North America.
It has emerged as one of the leaders in the European RV industry through the acquisition of Erwin Hymer Group, which was closed last February. European RV operations include eight production facilities that manufactured noted brands within Europe including Hymer, Buerstner, Carado, Eriba, Etrusco, Laika, Xplore, Elddis, Compass, Buccaneer, and CrossCamp.
Thor operates under three reportable segments: North American Towable Recreational Vehicles (accounting for 51.6% of total RV revenues in fiscal 2020), North American Motorized Recreational Vehicles (17.4%) and European Recreational Vehicles (31%). Operations of Thor’s Postle unit are included in “Other,” which is a non-reportable segment. This mainly includes the sale of aluminum extrusions and specialized component products.Thor reported a record backlog of $5.74 billion at the end of fiscal year 2020
As the RV market is fiercely competitive amid low barriers of entry, Thor counts Forest River, Inc. and Winnebago Industries, Inc. as its closest peers within North American towable and motorized segments. Its major competitors within the European segment include Trigano, Hobby/Fendt and Knaus Tabbert.
The recreational vehicle industry is influenced by many strong macroeconomic factors and is extremely sensitive to overall strength of the economy. The Global RV Market has enjoyed exponential growth since 2008 on the back of rising popularity of van life movement among millennials and changing customer lifestyles. The demand for RVs in luxury camping and travel amenities is likely to keep growing in the future.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Thor Industries, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in April 2011 would be worth $4,037.76, or a gain of 303.78%, as of April 1, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 199.65% and the price of gold increased 14.91% over the same time frame in comparison.
Analysts are forecasting more upside for THO too.
Shares of Thor have significantly outperformed the industry over the past year. Erwin Hymer Group buyout has boosted Thor’s position in the European market. The acquisition of Tiffin Homes has further expanded Thor's existing portfolio and bolstered revenue prospects. The company’s rising cash flow from operations and robust backlog are fueling investors' confidence. Further, cost cut initiatives undertaken by the firm is anticipated to aid margins. Notably, towable recreational vehicles (RVs) have been gaining traction globally and are expected to keep growing in the future, thereby aiding Thor’s prospects. While many firms have chosen to tap brakes on dividend amid coronavirus-led financial crisis, Thor intends to maintain its investor-friendly moves. As such, the stock warrants a bullish stance at the moment.
The stock has jumped 10.60% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 7 higher, for fiscal 2021; the consensus estimate has moved up as well.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
